Glossary topic · 17 terms
Climate finance.
Where climate money comes from, where it goes and the tests it should pass on the way.
Abatement cost
The cost of avoiding a unit of greenhouse gas emissions relative to a defined alternative.
Climate financeAdditionality
The requirement that an intervention creates a result beyond what would otherwise have occurred.
Climate financeBaseline scenario
A reference description of what would happen without the assessed intervention.
Climate financeBeyond value chain mitigation
Mitigation activities supported outside a company's own value chain.
Climate financeBuffer pool
A reserve of credits intended to address specified reversal risks within a programme.
Climate financeCarbon allowance
A unit granting permission to emit a specified amount under an emissions trading scheme.
Climate financeCarbon credit
A tradable unit issued under a programme, commonly representing one tonne of CO₂e reduction or removal.
Climate financeCarbon offsetting
Using reductions or removals outside an activity's boundary to compensate for its emissions.
Climate financeCarbon registry
A system recording carbon projects, unit issuance, transfers and final use.
Climate financeClimate finance
Financial resources directed towards mitigation or adaptation activities.
Climate financeCompliance carbon market
A market created by a legal system that requires regulated participants to meet emissions obligations.
Climate financeCounterfactual
A reasoned account of what would have happened under different conditions.
Climate financeCredit retirement
The permanent removal of a carbon credit from circulation for a stated use.
Climate financeCredit vintage
The period in which a credited reduction or removal occurred, as defined by a programme.
Climate financeLeakage
An increase in emissions outside a project's boundary caused by the project itself.
Climate financePermanence
The duration for which a claimed climate benefit remains in place, including the risk of reversal.
Climate financeVoluntary carbon market
A market in which buyers purchase carbon credits outside a direct legal compliance obligation.